Day 4 - OFT Test Case report

[EXC]

Day 4

Before continuing to set out Barclays case from yesterday QC Milligan raised several procedural issues regarding the schedule of the rest of the hearing and the unsolved matter of addressing the OFT’s stance on Plain Intelligible Language.

He suggested that the IDRC should be booked for beyond the week of the 28th. ‘’That’s fine but you’ll need a judge’’ said Justice Smith who went on to explain that he had ‘’commitments beyond that week’’. But then conceded he’ll have to reschedule them.

Between them they thrashed out a likely timescale. After Barclays finish hopefully by the end of the day the remaining 6 banks would need half a day each taking them to Monday. The OFT would then need a week to set out it’s case, then the PIL issued clarified and then both parties summing up. OFT’s Brian Doctor then announced he would not be available on the 7th and 8th so the judge suggested ‘’maybe the week of the 11th as well.

Brian Doctor was then asked to respond to the 12 questions the banks had submitted yesterday about the OFTs stance on Plain Intelligible language. He said the questions were in the main not relevant to the case and any answers ‘’wouldn’t be much help to the County Courts’’.

Milligan suggested the judge read some County Court Claims to help form his view. The judge finally decided to address the issue ‘’once we’ve got a few more submissions out the way’’.

Milligan returned to his setting out. During this he listed Barclays 4 or 5 ‘services’ for a payment or non-payment:

1. Provide a system of payment request i.e. cheque or direct debit.

2 Determine the validity of the payment request i.e. is the cheque signed? Is their a direct debit mandate?

3. All the payment requests are checked against funds available.

4. If insufficient funds are available the granting of an unauthorised overdraft is considered. This consideration is a contractual obligation.

5. If granted, a letter of notice of an unauthorised overdraft stating the terms is provided.

Justice Smith cleverly put the question ‘’In the event a cheque is presented with more than enough cleared funds available, would not the cheque be an instruction to pay and not a request? Is a direct debit in the same circumstances a mandate and not a request?

Milligan replied ‘’well that’s partly right’’.

When seeking clarification or questioning Milligan the judge often stopped in mid sentence to consider his words. It seemed to me that on occasion when Milligan was uncomfortable with the judges probing he would ‘interoperate’ Justice Smiths’ pauses as the end of his questioning and would quickly jump on to his next point. But not for long. The next time it happened the judge said quire firmly ’’Can I finish my question without you talking over me? The startled Milligan gave a grovelling apology. Marvellous.

At one point the judge went through Barclays T&Cs with Milligan from 2002 onwards. ‘’The ‘buffer’ is what?’’, and Milligan replied ‘’the threshold - £5 - you need to cross before a charge is triggered’’. ’’But ‘buffer' is not clear. Am I right that to understand the charges, you have to cotton on to what ‘buffer’ is?’’

To be continued in a couple of hours.

[EXC]

Re: Day 4

The IDRC feed room at lunchtime. The left hand screen is on the judge's seat and the right hand screen on the banks' QCs which when they are not in session is focused om the wall.

BBCs Ian Pollock is seen calling through the morning's report.

[Nattie]

Re: Day 4

its sounds fascinating, exc. I just wish that the reality of the statement was true though. There is no DIRECT contribution from the banks officials UNLESS there is insufficient funds and that the bank are considering paying an item. Cheques are only physically viewed on 2 accounts:
(1) If the item maybe returned and that the decision has not already automatically have been made;
(2) If the amount of the cheque is £10000.00 and above.(this limit was lower previously)

[EXC]

Re: Day 4 - OFT Test Case report

Day 4 cont

The judge asked for his view on whether the layout, font and colours of T&C’s are relevant to Plain Intelligible language. ‘’No’’ said Milligan.

The judge then asked ‘’If Barclays produced a 500 page booklet of T&Cs and the charges are somewhere on page 497, would this be in PIL?’’. ‘’Yes’’.

Another odd argument from the Barclays QC was that in T&Cs, if a term was ‘implied’ as opposed to being an ‘express term‘, it could not fall into the OFT’s unfairness category as the OFT have not questioned any ‘implied’ terms, only express terms.

He then spoke about the OFT’s 7 main gripes with the T&Cs and the way charges are administered. Milligan said ‘’they have been labelled ‘the seven deadly sins’ within our camp’’ (all the banks). And these included the order in which payments are processed.

After lunch the OFT QC gave out a document clarifying the PIL points they considered relevant to the case and put the PIL ball back in the banks’ court.

The judge took Milligan back to Barclays T&Cs. ‘’Where are the charges?’’. Milligan helpfully pointed out ‘’by the dagger on the bottom of the last page’’. The judge, admittedly looking at a court bundle photocopy, said ‘’that’s a dagger? It’s completely illegible’’.

The judge found other key terms in the T&Cs under the heading ‘important information’. ‘’Is the ‘important information' in the leaflet clear that they are terms?’’ Milligan confidently replied ‘’everything in the leaflet is contractual’’. The judge took another look. ‘’Is ‘Barclays is a responsible lender’ a contractual term?’’. ‘’Err no. Well yes’’.

There’s no question that the judge is finding holes in the banks defence. But it has to be said that in the short time the OFTs QC has spoken the judge has been, in my view, sometimes a bit critical of the consistency of the OFT’s case.

Milligan told the judge his submission is almost complete and will need just 15 minutes in the morning to finish. Tomorrow kicks off at 10.30.

[Amethyst]

Re: Day 4 - OFT Test Case report

PMSL ! That is brilliant I am liking this judge more and more each day

Many Many thanks EXC xx



''Justice Smith cleverly put the question ‘’In the event a cheque is presented with more than enough cleared funds available, would not the cheque be an instruction to pay and not a request? Is a direct debit in the same circumstances a mandate and not a request?''

I'm not sure I agree....a cheque can't switch between being an instruction and a request depending on what funds are available in the ACCOUNT. Therefore it is always a request ? Whats the text on a cheque say (I dont have a cheque book anymore)

[Tools]

Re: Day 4 - OFT Test Case report

Judge Andrew Smith is has IMO been the best man for the job by his approach to the case. I do not say this because he seems to be taking one side or another as we do not know that he may make similar slights of the OFT`s presentation.

I say this because he is being very meticulous as to clarify each and every point in `laymans terms` . He is playing a double role , one as a Judge and one as Joe Public. He is also very astute in cutting through all the crap that the QC`s and no doubt he will do likewise with the OFT`s. Whatever the result of this case is I think the decision will be a well informed and well thought though one, not the whitewash we were all expecting at all.

Hats off to the Judge , he is being thorough.

[Guest]

Re: Day 4 - OFT Test Case report

PMSL ! That is brilliant I am liking this judge more and more each day

Many Many thanks EXC xx



''Justice Smith cleverly put the question ‘’In the event a cheque is presented with more than enough cleared funds available, would not the cheque be an instruction to pay and not a request? Is a direct debit in the same circumstances a mandate and not a request?''

I'm not sure I agree....a cheque can't switch between being an instruction and a request depending on what funds are available in the accunt. Therefore it is always a request ? Whats the text on a cheque say (I dont have a cheque book anymore)

I'm sorry Ame, in the what?

A cheque (and also a direct debit) falls with the ambit of an instruction and forms part of the contractual obligation that a bank owes it's client.

It is never a request to pay, this has been established over a long period of time. For example, cheques are still governed by a statute from the Nineteenth Century titled the Bills of Exchange Act 1882. For most purposes, cheques are lumped in with even more esoteric documents such as promissory notes and bills of exchange and that provides a form of consumer protection not afforded anywhere else in the banking world.

Under the 1882 Act, cheques are contracts in themselves. They are a promise by the drawer of the cheque that the the payee will be paid the money as stated on the cheque itself. This is so irrespective of the purpose for which the cheque is paid, with only very limited exceptions.

If a cheque, or indeed a Direct Debit were merely a request, then this could not be the case.

The banks know this, more recent confirmation was stated in Barclays Bank v Simms [1980]

[EXC]

Re: Day 4 - OFT Test Case report

Joined up ‘justice seen to be done’.

Today I thought I’d watch the proceedings from the victorian splendor of the feed room at the Royal Courts of Justice. On entering the magnificent building, although I was only half way through Led Zeppelin’s ‘Misty Mountain Hop’, I somehow felt obliged to turn off my I-Pod before making enquiries about a pass.

‘’I’d like a feed room pass for the OFT v Banks hearing at the IDRC please’’.

‘’What, the Diana inquest?’’

‘’Err no. The OFT v Banks case. In courtroom 65 I think’’.

‘’I don’t know anything about it. You can’t come in’’.

So off down the road to the IDRC where I’m assured that although a technical problem meant that no feed was available at RCoJ yesterday, it was all sorted for today. But I decided to stay at IDRC anyway.

Then chatting to the feed tech guy who installed and runs both feeds he tells me that although they abandoned trying to fix yesterdays RCoJ feed at 9am, no one informed the usher who remained on duty until lunchtime.

Wondering if anyone would actually be able to access the RCoJ feed room at all if the doorman knew nothing about it, my question was answered when the tech guy showed me a monitor linked to a camera trained on the feed room itself showing all 50 seats unoccupied and one lonely usher.

[Amethyst]

Re: Day 4 - OFT Test Case report

lol see thats what I need....telling straight...and I know we have discussed this before now.

So as that is the case, a cheque not guaranteed with a card (meaningless IMO) should still be an instruction to pay ??

Just so its spelt out for everyone you understand

[Nattie]

Re: Day 4 - OFT Test Case report

Cet, how does the cheque Act 1992, I think, factor into the bill of rights and contractual obligations, if at all?

[Amethyst]

Re: Day 4 - OFT Test Case report

Joined up ‘justice seen to be done’.

Today I thought I’d watch the proceedings from the victorian splendor of the feed room at the Royal Courts of Justice. On entering the magnificent building, although I was only half way through Led Zeppelin’s ‘Misty Mountain Hop’, I somehow felt obliged to turn off my I-Pod before making enquiries about a pass.

‘’I’d like a feed room pass for the OFT v Banks hearing at the IDRC please’’.

‘’What, the Diana inquest?’’

‘’Err no. The OFT v Banks case. In courtroom 65 I think’’.

‘’I don’t know anything about it. You can’t come in’’.

So off down the road to the IDRC where I’m assured that although a technical problem meant that no feed was available at RCoJ yesterday, it was all sorted for today. But I decided to stay at IDRC anyway.

Then chatting to the feed tech guy who installed and runs both feeds he tells me that although they abandoned trying to fix yesterdays RCoJ feed at 9am, no one informed the usher who remained on duty until lunchtime.

Wondering if anyone would actually be able to access the RCoJ feed room at all if the doorman knew nothing about it, my question was answered when the tech guy showed me a monitor linked to a camera trained on the feed room itself showing all 50 seats unoccupied and one lonely usher.

ohhh dear.

How many were in the IDRC feed room today ??

[Amethyst]

Re: Day 4 - OFT Test Case report

Cet, how does the cheque Act 1992, I think, factor into the bill of rights and contractual obligations, if at all?

for reference if it helps

documents found in BAILII databases: 20

http://www.bailii.org/cgi-bin/markup...method=boolean

1. CHEQUES ACT 1992 (C. 32) - SECT 3 Amendment of Cheques Act 1957. (View without highlighting) [100%]
   (From United Kingdom Legislation; 2 KB)
2. CHEQUES ACT 1992 (C. 32) - SECT 1 Amendment of Bills of Exchange Act 1882: non-transferable cheques. (View without highlighting) [93%]
   (From United Kingdom Legislation; 3 KB)
3. CHEQUES ACT 1992 (C. 32) - SECT 2 Amendment of Bills of Exchange Act 1882: protection to banker and drawer where cheque is crossed. (View without highlighting) [92%]
   (From United Kingdom Legislation; 2 KB)
4. Cheques Act 1957 (c. 36) (View without highlighting) [84%]
   (From United Kingdom Legislation; 22 KB)
5. Cheques Act 1992 (c. 32) (View without highlighting) [84%]
   (From United Kingdom Legislation; 7 KB)
6. CHEQUES ACT 1992 - NOTES (View without highlighting) [84%]
   (From United Kingdom Legislation; 2 KB)
7. CHEQUES ACT 1992 (C. 32) - SECT 4 Citation and commencement. (View without highlighting) [84%]
   (From United Kingdom Legislation; 2 KB)

[Amethyst]

Re: Day 4 - OFT Test Case report

oh and to help set the scene of EXC's day.... here's his soundtrack

[Guest]

Re: Day 4 - OFT Test Case report

Cet, how does the cheque Act 1992, I think, factor into the bill of rights and contractual obligations, if at all?

Both the Cheques Act 1957 and the Cheques Act 1992 amend portions of the Bills of Exchange Act 1882 but the 1882 Act remains intact and still fully in force.

[Guest]

Re: Day 4 - OFT Test Case report

lol see thats what I need....telling straight...and I know we have discussed this before now.

So as that is the case, a cheque not guaranteed with a card (meaningless IMO) should still be an instruction to pay ??

Just so its spelt out for everyone you understand

A cheque is a bill of exchange which is defined as follows in the Bills of Exchange Act 1882.

"A Bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer."

Given that this is still the law, how can it be a request to pay?

It is an unequivocal instruction to pay and the bank as evidenced by the case of Nova (Jersey) Knit -v- Kammgarn Spinnerei [1977] where Mr Simon Berry QC, sitting as a deputy judge in the Chancery Division of the High Court noted that it is a well settled principle of law that a cheque is to be treated as cash. "A seller may demand payment in cash; but if the buyer cannot provide this at once, he may agree to take bills of exchange payable at future dates. These are taken as equivalent to deferred instalments of cash"

If a cheque were merely a request, how could this be the case?